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An engineer's observations on Web3 and its possibilities

324 points by treblig 5y ago

hathym 5y ago
Am I the only one shocked at the 9k$ price tag for an avatar?
- kwertyoowiyop 5y ago
  Aren’t most of these actually “wash sales” paid in funny money by sellers pumping up the prices? If not, there are many more crazy people in this world than I hoped.
antihero 5y ago
The "delightfully weird" aesthetic is MARKETING. The "culture"? Compromised. In the same way that legitimate artistic spaces of old are just capitalised upon and harvested to make that "hip bar", which is but a pale imitation designed to trick us. "Web3" is the Shoreditch of Web 1.0. There are no real things in it any more, no real culture, only rehashes created for profit! People who are creating "Web3" content are doing it in order to capitalise on the throwback culture, the "geekiness", it's all done purely to further the cash grab, it's co-opting and appropriating geek culture for personal gain. It's almost an artistic statement upon itself. Almost. > Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. GOOD. "Web3" will be rightfully choked to death by greed.
rbanffy 5y ago
Do we even have a generally accepted usable definition of what Web 3 would be? I see cryptocurrencies and ledgers being mentioned and, at the same time, comments mentioning the concepts aren't central to it. It seems we are the proverbial blind men describing an elephant.
qaq 5y ago
Is there a way to short "Web3" ?
- pcthrowaway 5y ago
  Using web3? Deposit stablecoins, borrow crypto and sell it.
  - qaq 5y ago
    More like a broad short of the all the BS web3 thingies not specifically crypto :). But good to know there is a simple trade to short crypto
- kwertyoowiyop 5y ago
  Remember, the market can stay irrational longer than you can stay solvent.
kwertyoowiyop 5y ago
> Smart contracts are deployed once and run forever; their code cannot be changed. The software development industry has literally zero experience with such a deployment model. Programmers for cartridge-based game systems and many other embedded devices with no connectivity have decades of experience with this.
eric_cc 5y ago
It's so weird to me how such a seemingly smart community (HN) can be so completely out of the loop with regards to one of the biggest sea changes to ever happen online. At least spend a week or two as a web 3 USER before you make your own conclusions. Forget the investment side for a minute and use the dapps.
byeager 5y ago
A pretty comprehensive overview that covers a lot of ground in the crypto/Web3 landscape.
rvz 5y ago
Excellent post. Succinctly cutting through the crypto hype-squad and addressing the concerns, unveiling the shortcomings and outlining the possibilities of the current Web3 ecosystem. Highly recommended read.
bla3 5y ago
> Hype-Free > It’s a hip bar in a club that a cooler friend had to tell you about. Ok then.
- davepeck 5y ago
  Hah! I do think there is an aspect of “cool club” that, whether successfully or not, the Web3 community wants to get across. I’m an outsider to that community. Perhaps @pinboard said it less hypefully when he described it as an “unregulated casino with a bar scene attached”.
danr4 5y ago
Why in the name of the lord would you block my ability to open links in new tabs (on the main site) Edit: this site navigation experience is one of the worst i've ever encountered. I'm really interested in looking around but it's so painfully slow. Edit 2: the new tab is blocked on the main site, not on the blog post
- officeplant 5y ago
  What in lords name kind of browser are you using? (working fine here in chrome/ff)
- davepeck 5y ago
  (I’m not having trouble with that and I certainly don’t intend to block you; what os/browser are you using?)
  - danr4 5y ago
    linux/chrome, ctrl + click / middle click not working. Edit: on the main site, blog post links work fine
    - jimkleiber 5y ago
      On main site, macos/ff, cmd + click doesn't open in a new tab either. However, right click, open in new tab does work.
      - davepeck 5y ago
        Thanks for the report. Definitely annoying. On the list to fix.
- SilasX 5y ago
  “I learned it by watching you” where “you” = 90% of the web today, sadly. (That is, unnecessarily and avoidable breaks some links that should be thusly clickable even if some still can be.) How we got to this point, I have no idea.
jude- 5y ago
> At the same time, smart contracts have some deeply problematic constraints: > Smart contracts can’t be upgraded. Smart contracts are deployed once and run forever; their code cannot be changed. The software development industry has literally zero experience with such a deployment model. I stopped reading here. First, this is factually wrong -- the software industry has tons of experience dealing with software that can't be upgraded. Ever try to upgrade the firmware on a chip with no I/O facility for doing so? The answer is you don't; you instead focus on getting the code correct the first time, and possibly you build out a way to recall the product and replace it with a fixed version and price in the risk of needing to do so into the product itself. It can be done; it just takes discipline. Second, if you don't understand why smart contracts being immutable is a necessary and desirable feature of the system, not a bug, then you're not going to understand much of web3. Like, think about it for five minutes -- if your smart contracts can be upgraded by default, and this code manages valuable digital assets, then their code can be replaced with code that steals those assets. Making this very, very, very hard is deliberate.
- davepeck 5y ago
  Original author here. I strongly disagree. While it’s certainly true that firmware on many devices can’t be or simply isn’t updated, it’s also the case that bugs ship. Because of this, engineers design and ship their more complex devices with the facility to upgrade firmware. Even my ages old stereo receiver is upgradable (although painfully so). But this is about smart contracts: code that in many cases moves money. I’d put that in the category of code that really could benefit from carefully controlled upgradability. I’m not the only one. For instance, the primary USDC contract on Ethereum is a proxy contract — it’s upgradable by design. I think that makes a lot of sense, and apparently so do the engineers managing those many billions of dollars: they’ve weighed the balance of “trust” in the abstract with “make sure it doesn’t break” in the real and made their decision. Beyond that, a guiding principle of some newer blockchains (like Tezos) is that code will need to evolve over time. Like many things Web3, it’s too soon to tell how things will shake out in the long run, and a variety of approaches seems desirable.
  - sharemywin 5y ago
obarthelemy 5y ago
I almost read the thing, but I can only read so many words in that horrendous font. Is this representative of the substance vs form stance of web3 ?
- philliphaydon 5y ago
  > font-feature-settings: "ss02", "ss10"; I have no idea what this does but turning this off made it readable.
jerrygoyal 5y ago
are there any other working examples of web3 except torrents?
- hervature 5y ago
  Sorry, I'm not going to allow people to rewrite history and claim torrents are Web3. The technology is 20 years old and the most dominant protocol for file sharing.
  - kall 5y ago
    Arguably the most successful decentralized protocol so far. They where just 20 years ahead of the scene.
    - jerrygoyal 5y ago
      sorry for misinfo. torrents are not at all web3. web3 usually means decentralized plus backed by blockchain. DTube and Steemit are some products built on web3.
machiaweliczny 5y ago
I think the biggest potential might be in creating companies and contracts. I would love smart contracts that with given payment also give me some shares of company. Also investing in pre IPO for retail investors in scam-resistant schemes. Public funding of projects. Voting with ones wallet but formalized and outliers and spam resistant. Ability to profit from and measure public goods thus allowing to employ Capitalism there and get rid of EU bureocracy. One can dream.
- pcthrowaway 5y ago
  These things already exist in forms. Take a look at DAOs
- dehrmann 5y ago
  > Also investing in pre IPO for retail investors in scam-resistant schemes. If you're an accredited investor (which is easier to be than ever), there's always Equityzen and friends. But it's already not so scam-resistant. There are lots of sketchy startups out there, and I'm not sure why one bypassing traditional finance channels would be any less scammy.
getsprite 5y ago
Great job with this. Very nice overview.
dopa42365 5y ago
I don't mind crypto as anonymous payment to buy illegal things online. And that's all it's good for, really. Shady gambling, scams and shitty art is not the future.
nathias 5y ago
I disagree with much of the other points but building on ethereum is amazing. Compare creaing AWS microservices and its crappy web UI with hardhat that emulates everything locally. Best practices do exist this is not new tech, Ethereum is almost 10 years old.
bob331 5y ago
Blockchain had no use case, it is distributed crap
exdsq 5y ago
Glad to see hype-free crypto posts :)
WastingMyTime89 5y ago
Not going to lie, I thought and still think that the whole Web 2.0 thing was clever marketing and window dressing on top of fairly pedestrian but useful technologies. It was actually less of seismic shock than mobile first which despite being a bigger shift didn't actually get a number. As far as I'm concerned, Web3 is beyond this. It's what happen when you let Ponzi schemers write the marketing material. I can't for the life of me discern what's of actual value from what is a fabrication in the pile of technologies put forward. It doesn't help that I personally have yet to see a use for a blockchain which isn't replicating an existing financial instrument while trying to avoid the eyes of the state. I’m sure there is some good things in the middle of it all but I respect the authors of this article for having the courage to delve into the whole steaming pile. I certainly do not have it.
- practice9 5y ago
  Blockchain isn't even central in Web3, but it surely helps. Web3 = decentralized identity, full data and connection graph ownership by user, reputation transfer, verification via zero knowledge proofs, support for VR/AR and 3D objects. All of this stuff is either in prototype or draft phase, but it's ok. These things need to be built to stop horror stories on HN about "algorithm justice" and "data kingdoms”: - Google accidentaly bans your 10+ year old Gmail account that is a huge part of your online identity, oops. You can't access your important data or reach support if you can't make this situation a huge deal on HN, Reddit or Twitter - Facebook or Twitter locks your account because you added a new sentence to your About you section - LinkedIn reads your messages and makes sure you can't automate responses to recruiters, locks your account if you reply in a generic way
  - chrisfrantz 5y ago
    Sure, but that’s replaced with user’s being in control of their identity (permanently). Lose your keys, you’re out of luck and locked out of who knows how many applications permanently. It might be fine for us, but just think of the less technically inclined folks in your life. Are they going to remember a 32 word phrase or use a password manager for a key? And what happens if they’re hacked? If google detects your account is hacked, you may be able to salvage it. If someone nabs your wallet, they get access to however many apps you have set up along with whatever funds you have in there.
madrox 5y ago
Today, I hopped into a Twitter Space called "web3 for gaming" and from the moment I joined until the moment I left five minutes later was talking about how crypto payments need to be better on mobile. This feels like when web2 was coalescing as an idea. A lot of people were trying to shoehorn their pet technologies into the discussion. XML was holding on for dear life. It's ridiculous and completely divorced from the topic at hand. My only explanation for the behavior is that it's difficult to see the obvious absurdity when you're deeply invested in a particular outcome.
euske 5y ago
Every time I read about decentralization, I remember this episode from NPR Planet Money (one of the best podcasts, btw). It's about Libertarian Summer Camp where they tried to spend a day without fiat money. Gold standard everything. Turned out it's actually pretty hard because you have to get gold, and make sure the gold isn't fake, all by yourself. You bought a hotdog with the gold and now you have to worry about if it contains anything FDA-banned substances, etc etc. cf. https://www.npr.org/sections/money/2017/06/28/534735727/episode-286-libertarian-summer-camp https://www.npr.org/sections/money/2017/06/28/534735727/epis... Being decentralized means that all the efforts that a central government is currently taking will be distributed to everyone, and now everyone has to worry about things that were taken granted before: basic safety, security and trust. This is why there aren't many decentralized systems that caught on because their usability is pretty bad for most people.
- 1ark 5y ago
  Can't crypto exchanges provide the same safety, security and trust as banks today? Everyone can choose to be their own custodian or not.
  - 1270018080 5y ago
    Yeah a centralized and regulated market to exchange funds would definitely make it easier to use crypto as anything more than a scam or buying drugs.
- deleted 5y ago
  [deleted]
thesuperbigfrog 5y ago
Web3 requires retrofitting the web to use blockchain technologies to do what the web can mostly do already. In "Blockchains Are a Bad Idea", James Mickens gives several arguments against blockchain-based systems like Bitcoin: See his presentation here: https://youtu.be/15RTC22Z2xI https://youtu.be/15RTC22Z2xI 1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions. 2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections. 3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have.
- jimmydorry 5y ago
  > 1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions. Bitcoin provides pseudononymous identities. Just like how someone can move to a new domain or amazon account after word gets out that they are selling deffective goods. Trust only goes so far, even when dealing with people you should be able to trust. If this were not the case, then close-to-home scams would not exist. E.g. embezellment and other forms of stealing from people you work with face-to-face. . >2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections. The legal system is complex, slow, and _EXPENSIVE_. A lot of bad behaviour also goes unpunished when the cost to rectify is greater than the amount stolen. Offering an alternative, low-cost and quick system, and accepting the downside of there being no "takebacks", who is to say this is a strictly negative thing? There is also nothing stopping a service provider from stepping in and providing dispute resolution by way of mostly automated eskrow. If the transaction of goods for money happens without flaw, then the money is released automatically. If an issue occurs but the buyer and seller can resolve it amicably, that two is automated. In the unlikely case that one or both parties are malicious, the service provider reviews the case and releases funds as appropriate (e.g. checking that the parcel was actually posted, reviewing images of the good if it was damaged in transit, resolving as best able in case of scams). . >3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have. They can, but there are very few examples of such tools. This is hackernews, and this opinion is repeated ad nauseum, yet I don't see anyone actually going out and hacking something together. Just like how it has been possible for financial houses to open up APIs to allow people to better manage, automate or make their money work exactly they want; it should come at no surprise when something comes along that actually allows this, no matter how much people cry that this was all possible and much more efficient without $NewTech, the people that have adopted said $NewTech aren't going to care too much.
smoyer 5y ago
I kept reading hoping for sections on IPFS and DAT/Hyper. In many ways I'm more excited to see where peer-to-peer DHTs go!
slmjkdbtl 5y ago
The way I see it is the idea of "ownership" creates a way to produce scarcity from story telling. If you have a good story to tell about why people should "own" your "goods" you can make a fortune. I think it's very interesting in economy / sociology / psychology sense, and an amazing opportunity for cash grab. But I won't call it a progress on web to call it "web3" because it does nothing on connecting people together like web 1.0 and web 2.0
ldehaan 5y ago
Someone should let Amazon know web 3.0 isn't serverless, they didn't get the memo.
- detaro 5y ago
  Amazon is using "web 3.0" as a label for Lambda, really?
  - kwertyoowiyop 5y ago
    Oooh, isn’t Lambda in the metaverse too?
Uehreka 5y ago
> However: just because you don’t need a blockchain to do something doesn’t mean the industry won’t settle on using blockchains to do it anyway. The technology industry is immensely path dependent. Particularly when buckets of money appear, feedback loops can form whose outcomes seem all but inevitable. Speculators and venture capitalists alike have inundated crypto with cash. There’s a certain reflexivity to it: when cash pours into anything, the intrinsic value of the thing is at least the value of the cash… and potentially much more, if that cash is invested productively! Blockchains may become the future — including for use cases where they are not natural fits — only because their story was told, speculated on, invested in, and told some more. This bothers me: That we could end up with expensive, unnecessary systems that exist not because they offer a tangible benefit but because everyone just kept going along with things, collecting investor money and ignoring criticism until it was too late. I don’t see that being apocalyptic necessarily, I think Adam Smith’s scythe will mow down any companies that make truly bonkers decisions on this stuff. But it bugs me that we could collectively spend years arguing about this and building blockchains and training a generation of blockchain engineers only for the near totality of blockchain stuff to fail for reasons that were evident from the beginning.
stanmancan 5y ago
Discord but access is granted by owning a specific NFT. Mint limited numbers of the tokens for specific groups. The value of the token ends up being based on the current members. Want in? Buy a token off someone. Done with the group? Sell it. Exclusivity is appealing to many.
de6u99er 5y ago
If it doesn't get broad adoption, can we reuse v3 or do we have to go directly to v4 and let everybody know that we don't talk about v3?
- denton-scratch 5y ago
  The first rule of v3 club?
- twic 5y ago
  It'll be IPv4 -> IPv6 all over again.
sdn90 5y ago
I think if you take a Western/developed country centric view, all of crypto seems pretty useless. In the rest of the world, you probably dealing with some or all of the following: - Dysfunctional government - Hyperinflation - Limited access to financial/investment products if any The crypto space does have a huge amount of problems, but I think there's some innovative stuff going on in crypto. You'll end up writing it off if you just fixate on the speculators and the "blockchain everything" people.
husamia 5y ago
missed an important development of IPFS
firexcy 5y ago
Thank you for the no-nonsense writeup. Simply reading through it helped me solved many ambiguities and puzzles. Could you please provide some further readings, esp. high quality materials that have had helped you in the compilation of these observations?
city17 5y ago
Whenever I read about Web3 I always get the idea the feeling it's an entirely self-interested idea or movement, and there is nothing idealistic about it. Instead of control being with a single corporation, control will be with an exclusive limited group of founders who got in cheap, and to which access is sold at a significant premium. It pretends to democratize things, but rather moves from a monopoly to an oligarchy, which works great for the 'in' group but not necessarily for those outside it.
otikik 5y ago
> If the crypto economy has productive ends, they must ultimately rest here Seeing this put as a conditional is refreshing after all the hype.
Animats 5y ago
It's a good article. Much to think about. I'm not sure that "blockchain" is central to "Web3". "Web3" may be augmented reality, which doesn't need a blockchain.
- exdsq 5y ago
  I think Web3 is just a term that something will change the web. Semantic web used it first, there's the whole AI/VR Web3 movement, there's crypto, etc...
davepeck 5y ago
Hi all — I wrote these notes with my colleagues at PSL while trying to wrap our heads around the madness that is Web3/Crypto. I’m an engineer by background and sort of a skeptic by nature; I think of this piece as a collection of loosely connected, hopefully pragmatic opinions from a builder’s perspective.
- jules-jules 5y ago
  thanks for the well-written primer. Just one observation. You write: >Over time, Ethereum has proven to be sub-optimal for the incredible demand DeFi services have seen. The network has diseconomies of scale and, given its low throughput capability, gas fees (the cost of executing a transaction on the Ethereum network) have recently been over $150. This makes executing simple low-value transactions, such as swaps on Uniswap, prohibitively expensive! Since the emergence of DeFi, there are several other L1 chains (like Solana and Avalanche) that have become a popular place for DeFi developers to build with transaction fees. Ethereum itself is also in the midst of the infamous “ETH2” transition, which aims to solve this problem on the Ethereum network itself. This is not correct in the sense that a) 'ETH2.0' is now deprecated term, and b) does not solve the gas fee issue by itself. Ethereum has pivoted to a modular rollup centric roadmap that solves the high costs of transactions already now (cf StarkWare and MatterLabs zkSync) while still keeping the secuirty and decentralisation of the main Ethereum settlement layer. This is in contrast to other L1s such as Solana which have sacrificed decentralisation for higher speed and throughput. Check out this wonderful resource by @epolynya for the most comprehensive summary of this new roadmap https://polynya.medium.com/rollups-data-availability-layers-modular-blockchains-introductory-meta-post-5a1e7a60119d https://polynya.medium.com/rollups-data-availability-layers-...
  - davepeck 5y ago
    Thanks. This is good detail. I may go back and revise this corner of the post.
- acjohnson55 5y ago
  This is truly fantastic work. This is going to be my new recommendation for anyone who wants to seriously grapple with the space. I'm a crypto skeptic, but I think you make a strong point that crypto doesn't have to win the future on technical terms, it may be the place where new products emerge simply because it inspires people.
v_london 5y ago
Thanks for the great article! I wished the section on DeFi addressed the biggest elephant in the room, overcollateralization. A DeFi borrower always needs to lock in more assets as collateral than what they are borrowing, thus defeating the whole purpose for taking a loan aside from financial speculation. And there's no real way to solve it: all mechanisms I've heard of either try to replicate some form of background checks on borrowers (not decentralised, and uses the real world), or claim to use real-world assets as NFT collateral (once again, uses the real world). Thus I can't see a way for DeFi loans to ever be used for mortgages and other loans regular people actually need. Of course DeFi is more than just loans and borrowing, but that's an aspect that's constantly promoted by evangelists so I think it's an important point to mention.
- toolz 5y ago
  Can you provide an example of someone claiming defi can provide solutions for loans? The best I can come up with logically is something like cardano's prism that effectively puts a persons encrypted identity on the blockchain which allows that person to reveal things like their grades etc. to future partners as a means of quickly establishing trust. Maybe something like that could enable defi loans? Even that is a stretch.
  - hervature 5y ago
    Searching for "DeFi loan" returns a deluge of results with https://defirate.com/loan/ https://defirate.com/loan/ at the top for me. They seem content claiming that secured loans are useful loans.
    - spullara 5y ago
      They are primarily useful when selling the collateral would involve paying income taxes. Instead you borrow against it.
- DreamWalker1 5y ago
  I think DeFi basically justifies the high market cap of ethereum. You have a decentralized exchange working 24h, with basically no downtime. Compare it to normal exchanges: - need to register - need kyc - hard to tranfer LARGE sums cheaply - your bank can block your assets as well as your gouverment - fees are sometimes very high as well. Example tried to convert one currency to an other 1% fees in europe. I think you would pay less in a DeFi setup. - Now imagine you could buy stocks and so on on defi. That would be a killer application. I could go on but the point is. DeFi solves a problem.
manbart 5y ago
‘Web3’ is just new window dressing on the same old crypto casino. “Get rich quick!” is the selling point
- kwertyoowiyop 5y ago
  It needs a new protocol: ponzi://
- Animats 5y ago
  Exactly. If Bitcoin had not gone "to the moon", all of this would be a tiny niche, like Chaum's DigiCash was. The problem is all the junk riding Bitcoin's coattails. At some point, probably soon, the bottom will fall out of at least part of this. NFTs are already crashing. That's not too visible, because there's no "market price" across different items. But you can look at sales on OpenSea, and notice that the resale prices are mostly lower than the previous price.[1] Smooth Love Potion [2], part of the Axie Infinity Ponzi, already crashed. The big moment will come when Tether comes un-tethered. It cannot survive a net outflow, because it has very little asset backing. Something is going to crack in the Tether/Binance area. Binance is giving some people 200x leverage.[3] That never ends well. [1] https://opensea.io/collection/collectvox?search[sortAscending]=false&search[sortBy]=LAST_SALE_PRICE&search[toggles][0]=HAS_OFFERS https://opensea.io/collection/collectvox?search[sortAscendin... [2] https://coinmarketcap.com/currencies/smooth-love-potion/ https://coinmarketcap.com/currencies/smooth-love-potion/ [3] https://www.coalexander.com/post/the-tether-binance-axis-and-the-great-crypto-crash-of-2022 https://www.coalexander.com/post/the-tether-binance-axis-and...
  - cinntaile 5y ago
    > Exactly. If Bitcoin had not gone "to the moon", all of this would be a tiny niche, like Chaum's DigiCash was. I don't think "if this didn't happen then this wouldn't have happened" is a real argument, it's just a statement. True for just about everything. It's possible I'm misinterpreting and you just mean it as a statement?
    - moolcool 5y ago
cornstalks 5y ago
> Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. Blockchains upend this, allowing inventors to capture considerable value for themselves. That... seems like a huge negative to me. No wonder crypto enthusiasts give me the same feeling as relentless door-to-door salesmen.
- wmf 5y ago
  The fat protocol hypothesis hasn't been proven. If your app has value, why would you let a protocol take any of it?
  - krrrh 5y ago
    It still really depends how far down the stack you go. One of the better observations Eric Raymond made in his essay The Magic Cauldron was that the closer you get to infrastructure the stronger the demands become for open protocols (emphasis added): > The network effects behind TCP/IP's and Linux's success are fairly clear and reduce ultimately to issues of trust and symmetry -- potential parties to a shared infrastructure can rationally trust it more if they can see how it works all the way down, and will prefer an infrastructure in which all parties have symmetrical rights to one in which a single party is in a privileged position to extract rents or exert control. Sure you may be able to build a bespoke proprietary protocol on top of the open foundations of http or the bitcoin and etheream blockchains, but businesses will have an incentive to shop for more open systems if they are staking anything important on it. http://www.catb.org/esr/writings/magic-cauldron/magic-cauldron-10.html http://www.catb.org/esr/writings/magic-cauldron/magic-cauldr...
    - davepeck 5y ago
      This is great! I remember Raymond’s post from my distant past. Thanks for bringing it to my attention again — it’s very relevant.
  - machiaweliczny 5y ago
    Because this allows to make bigger pie for everyone in the end. Not sure it does. Just speculating based on economic benefits of infra - see roads, transport, internet, aws etc.
kordlessagain 5y ago
Meanwhile, distributed and/or encrypted technologies are enabling flash mobs to loot $200 jeans from Nordstroms.
- aspenmayer 5y ago
  Link?
mattlondon 5y ago
So .. TL;Dr web3 is nothing to do with the web, and is just the same old smart contract crypto hype we've all seen before? No mention of the actual distributed web protocols like IPFS or Dat as far as I could tell. Have I massively missed something or has the crypto community just co-opted the name web3 for their own non-web related stuff? How does the web factor in to crypto?
- kall 5y ago
  I think the web part is now "log in with your wallet, fetch account state from the blockchain". It all happens on the normal web and the blockchain access is facilitated by "normal" web API gateways like Infura or Cloudflare. This is my view from the outside so it might be off on the details. It seems pretty reasonable, as far as crypto stuff goes, except that there is a massive, expensive machine behind all the HTTP APIs that is solving very specific problems you probably don‘t have while making someone rich.
  - k__ 5y ago
    Also, many wallets come with a browser extension, to blur the lines between web and crypto even more.
- BatteryMountain 5y ago
  So I attended a year end function last month and there was an independent financial advisor present (CFP straight-arrow-type-guy that was reluctant about crypto's a few years ago). During a conversation he expressed regret that he didn't get onto the crypto train 3 years ago and that he is going alllll in on web3 and threw the word nft's around a bit and that he has some more web3/nft webinars lined up for the coming week. Mind you, this guy manages about $50M for his clients (it's true, I saw his dashboards on a third party website - he knows his shit). He told a whole bunch of people at the event about nft and how it will put spotify and youtube out of business. But the thing is, he is not tech-inclined at all and spends most of his time on excel and on third party platforms (as in, fund manager platforms, insurance platform, medical aid, taxation etc). So what I took away from his talking about this stuff is that financial advisors are being "educated" to think that web3 = crypto = new 4th industrial revolution etc and everyone will get rich as hell very quickly so we all have to do it NOW. It was a huge wtf moment for me because I was mostly ignoring this stuff and the whole web3 umbrella and here I have a legit CFP guy talking about this stuff. All while I'm standing there not knowing wtf he is going on about, most of it sounding extremely dodgy from a software developers perspective. Make of this what you will but I think a lot of people will get hurt, esp non-tech people. I feel like these people live in an alternate universe and they've built a whole ecosystem of webinars, trading platforms that they are trying to sell onto normal people that doesn't know better; that doesn't seem to be used for the greater good (most of it scammy or used for crime etc).
evergrande 5y ago
Quite possibly the difference between people who are hostile vs favorably disposed to Web3 is whether or not they think traditional orgs work fine or need improvement. Frustration with traditional organizational pathologies is not universal. The right comparison may not be with past tech revolutions. It may be to organizational evolutions like monarchy to democracy, women entering the workplace, the invention of the limited liability corporation etc. In each case there were people who thought it was unnecessary. I suspect what makes Web3 appear extra contentious is that it divides core members of the middle class. Like artists for eg. Artists tend to be reliably anti-tech initially, taking pride in being socially middle class but economically underclass unless supported by other means. Artists still largely depend on patronage but now are less beholden to institutions/expert tastemakers (museums, grants, commercial art buyers like movies) or potentially tyrannical cohesive crowds based on ideological aesthetics (Patreon style). Web3 loosens the grip of both. Web3 is Crowds3 too. We focus too much on authority figures and institutions. Crowds evolve too. Crowd1 = geographic scene in a city that could ostracize you Crowd2 = filter-bubble online crowd that can cancel you Crowd3 = skin-in-the-game crowd that doesn’t subsume individuals [credit to https://twitter.com/vgr/status/1463182365555970049 https://twitter.com/vgr/status/1463182365555970049]
- kall 5y ago
  If the tyrannical crowds on Patreon are a problem skin in the game is going to 100x that. "You have a fiduciary responsibility to every single one of your fans“ sounds like a black mirror episode.
- jollybean 5y ago
  I suggest the people who have the most beef with 'traditional orgs' haven't worked in them (or not for very long) and don't understand the nuance of the limitations of them, and also don't grasp the value that's created at scale. Also, I think less than 0.01% of 'artists' have ever heard of Web3, even most people in Tech haven't really hard of it or couldn't describe it in any meaningful way.
PretzelPirate 5y ago
One interesting misrepresentation is this: “ Several innovations in distributed consensus design make Solana’s performance possible.” Solana’s consensus protocol isn’t responsible for its performance, it’s the fact that they mandate higher performing machine SKUs and at least 500Mbs (recommending 1Gbs) internet speeds. They also had to largely centralizing and have around 1000 validators. Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node. I’m not sure why I’d use a blockchain that’s very close to being a centralized service. That’s the worst of both worlds, you don’t have censorship resistance you get with Ethereum and you don’t get the consumer protections you get with fully centralized services.
- lui8906 5y ago
  > Solana’s consensus protocol isn’t responsible for its performance, it’s the fact that they mandate higher performing machine SKUs and at least 500Mbs (recommending 1Gbs) internet speeds. While it's true that Solana nodes have higher requirements than Ethereum full nodes (though not sure about validators?) I think it's incorrect to say that Solana's consensus protocol is not responsible for the high performance performance. Solana's consensus protocol (Tower BFT) works tightly with Proof of History. These two elements coupled together allow that the validator leader can be rotated asynchronously allowing performance increases in block propagation, throughput and ledger storage. Have you really had a good read of how Solana works? For eg. Sealevel allows for parallel contract execution, something which to my knowledge no other chain is capable of. All these innovations combined with the higher node requirements allow for TPS that no other chain is even close to and the Ethereum Modular vision will not achieve for quite some time (assuming it works). > They also had to largely centralizing and have around 1000 validators. Not sure what you're pointing to here. There was 600 validators a few months ago. Now there is 1000. 2000 additional validators are on devnet and would likely go onto mainnet in the coming months. How else should a blockchain decentralize then to add additional validators and try and spread the delegated stake around to reduce the number of nodes required to halt the network? The fact that Solana went down for 17 hours not too long ago and there was nothing Solana labs could do to bring it back shows the validators are not run by themselves. > Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node. Ethereum's fees are due to its wild success + it's very low TPS on the L1 because it was more or less the first of its kind. Subsequent chains like Solana have made thousands of small or large alternative engineering decisions that in sum allow for much higher throughput and lower fees. Solana doesn't use gas, perhaps you're thinking of BSC or AVAX?
booleandilemma 5y ago
Who defines this stuff?
vmception 5y ago
> However: just because you don’t need a blockchain to do something doesn’t mean the industry won’t settle on using blockchains to do it anyway. Exactly, both blockchain skeptics and one-blockchain maximalists miss that people are doing what the market can bare. Do what the market can bare. Why die on the ideological hill? What utility does that have? The path for founders is simpler. The founders bring their whole network to their ventures over and over and over again. That is projects launched on blockchain platforms right now. Unless the non-blockchain space magically becomes competitive for founders, globally, of any background, anonymously, overnight, then that world isn't competition. There are 3 trillion dollars within the crypto ecosystem that doesn't need to be converted to cash to be used to fund new ventures.

324 points by treblig 5y ago

hathym 5y ago

Am I the only one shocked at the 9k$ price tag for an avatar?

kwertyoowiyop 5y ago
Aren’t most of these actually “wash sales” paid in funny money by sellers pumping up the prices? If not, there are many more crazy people in this world than I hoped.

antihero 5y ago

The "delightfully weird" aesthetic is MARKETING. The "culture"? Compromised. In the same way that legitimate artistic spaces of old are just capitalised upon and harvested to make that "hip bar", which is but a pale imitation designed to trick us. "Web3" is the Shoreditch of Web 1.0. There are no real things in it any more, no real culture, only rehashes created for profit! People who are creating "Web3" content are doing it in order to capitalise on the throwback culture, the "geekiness", it's all done purely to further the cash grab, it's co-opting and appropriating geek culture for personal gain. It's almost an artistic statement upon itself. Almost. > Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. GOOD. "Web3" will be rightfully choked to death by greed.

rbanffy 5y ago

Do we even have a generally accepted usable definition of what Web 3 would be? I see cryptocurrencies and ledgers being mentioned and, at the same time, comments mentioning the concepts aren't central to it. It seems we are the proverbial blind men describing an elephant.

qaq 5y ago

Is there a way to short "Web3" ?

pcthrowaway 5y ago
Using web3? Deposit stablecoins, borrow crypto and sell it.
- qaq 5y ago
  More like a broad short of the all the BS web3 thingies not specifically crypto :). But good to know there is a simple trade to short crypto
kwertyoowiyop 5y ago
Remember, the market can stay irrational longer than you can stay solvent.

kwertyoowiyop 5y ago

> Smart contracts are deployed once and run forever; their code cannot be changed. The software development industry has literally zero experience with such a deployment model. Programmers for cartridge-based game systems and many other embedded devices with no connectivity have decades of experience with this.

eric_cc 5y ago

It's so weird to me how such a seemingly smart community (HN) can be so completely out of the loop with regards to one of the biggest sea changes to ever happen online. At least spend a week or two as a web 3 USER before you make your own conclusions. Forget the investment side for a minute and use the dapps.

byeager 5y ago

A pretty comprehensive overview that covers a lot of ground in the crypto/Web3 landscape.

rvz 5y ago

Excellent post. Succinctly cutting through the crypto hype-squad and addressing the concerns, unveiling the shortcomings and outlining the possibilities of the current Web3 ecosystem. Highly recommended read.

bla3 5y ago

> Hype-Free > It’s a hip bar in a club that a cooler friend had to tell you about. Ok then.

davepeck 5y ago
Hah! I do think there is an aspect of “cool club” that, whether successfully or not, the Web3 community wants to get across. I’m an outsider to that community. Perhaps @pinboard said it less hypefully when he described it as an “unregulated casino with a bar scene attached”.

danr4 5y ago

Why in the name of the lord would you block my ability to open links in new tabs (on the main site) Edit: this site navigation experience is one of the worst i've ever encountered. I'm really interested in looking around but it's so painfully slow. Edit 2: the new tab is blocked on the main site, not on the blog post

officeplant 5y ago
What in lords name kind of browser are you using? (working fine here in chrome/ff)
davepeck 5y ago
(I’m not having trouble with that and I certainly don’t intend to block you; what os/browser are you using?)
- danr4 5y ago
  linux/chrome, ctrl + click / middle click not working. Edit: on the main site, blog post links work fine
  - jimkleiber 5y ago
    On main site, macos/ff, cmd + click doesn't open in a new tab either. However, right click, open in new tab does work.
    - davepeck 5y ago
      Thanks for the report. Definitely annoying. On the list to fix.
SilasX 5y ago
“I learned it by watching you” where “you” = 90% of the web today, sadly. (That is, unnecessarily and avoidable breaks some links that should be thusly clickable even if some still can be.) How we got to this point, I have no idea.

jude- 5y ago

> At the same time, smart contracts have some deeply problematic constraints: > Smart contracts can’t be upgraded. Smart contracts are deployed once and run forever; their code cannot be changed. The software development industry has literally zero experience with such a deployment model. I stopped reading here. First, this is factually wrong -- the software industry has tons of experience dealing with software that can't be upgraded. Ever try to upgrade the firmware on a chip with no I/O facility for doing so? The answer is you don't; you instead focus on getting the code correct the first time, and possibly you build out a way to recall the product and replace it with a fixed version and price in the risk of needing to do so into the product itself. It can be done; it just takes discipline. Second, if you don't understand why smart contracts being immutable is a necessary and desirable feature of the system, not a bug, then you're not going to understand much of web3. Like, think about it for five minutes -- if your smart contracts can be upgraded by default, and this code manages valuable digital assets, then their code can be replaced with code that steals those assets. Making this very, very, very hard is deliberate.

davepeck 5y ago
Original author here. I strongly disagree. While it’s certainly true that firmware on many devices can’t be or simply isn’t updated, it’s also the case that bugs ship. Because of this, engineers design and ship their more complex devices with the facility to upgrade firmware. Even my ages old stereo receiver is upgradable (although painfully so). But this is about smart contracts: code that in many cases moves money. I’d put that in the category of code that really could benefit from carefully controlled upgradability. I’m not the only one. For instance, the primary USDC contract on Ethereum is a proxy contract — it’s upgradable by design. I think that makes a lot of sense, and apparently so do the engineers managing those many billions of dollars: they’ve weighed the balance of “trust” in the abstract with “make sure it doesn’t break” in the real and made their decision. Beyond that, a guiding principle of some newer blockchains (like Tezos) is that code will need to evolve over time. Like many things Web3, it’s too soon to tell how things will shake out in the long run, and a variety of approaches seems desirable.
- sharemywin 5y ago

obarthelemy 5y ago

I almost read the thing, but I can only read so many words in that horrendous font. Is this representative of the substance vs form stance of web3 ?

philliphaydon 5y ago
> font-feature-settings: "ss02", "ss10"; I have no idea what this does but turning this off made it readable.

jerrygoyal 5y ago

are there any other working examples of web3 except torrents?

hervature 5y ago
Sorry, I'm not going to allow people to rewrite history and claim torrents are Web3. The technology is 20 years old and the most dominant protocol for file sharing.
- kall 5y ago
  Arguably the most successful decentralized protocol so far. They where just 20 years ahead of the scene.
  - jerrygoyal 5y ago
    sorry for misinfo. torrents are not at all web3. web3 usually means decentralized plus backed by blockchain. DTube and Steemit are some products built on web3.

machiaweliczny 5y ago

I think the biggest potential might be in creating companies and contracts. I would love smart contracts that with given payment also give me some shares of company. Also investing in pre IPO for retail investors in scam-resistant schemes. Public funding of projects. Voting with ones wallet but formalized and outliers and spam resistant. Ability to profit from and measure public goods thus allowing to employ Capitalism there and get rid of EU bureocracy. One can dream.

pcthrowaway 5y ago
These things already exist in forms. Take a look at DAOs
dehrmann 5y ago
> Also investing in pre IPO for retail investors in scam-resistant schemes. If you're an accredited investor (which is easier to be than ever), there's always Equityzen and friends. But it's already not so scam-resistant. There are lots of sketchy startups out there, and I'm not sure why one bypassing traditional finance channels would be any less scammy.

getsprite 5y ago

Great job with this. Very nice overview.

dopa42365 5y ago

I don't mind crypto as anonymous payment to buy illegal things online. And that's all it's good for, really. Shady gambling, scams and shitty art is not the future.

nathias 5y ago

I disagree with much of the other points but building on ethereum is amazing. Compare creaing AWS microservices and its crappy web UI with hardhat that emulates everything locally. Best practices do exist this is not new tech, Ethereum is almost 10 years old.

bob331 5y ago

Blockchain had no use case, it is distributed crap

exdsq 5y ago

Glad to see hype-free crypto posts :)

WastingMyTime89 5y ago

Not going to lie, I thought and still think that the whole Web 2.0 thing was clever marketing and window dressing on top of fairly pedestrian but useful technologies. It was actually less of seismic shock than mobile first which despite being a bigger shift didn't actually get a number. As far as I'm concerned, Web3 is beyond this. It's what happen when you let Ponzi schemers write the marketing material. I can't for the life of me discern what's of actual value from what is a fabrication in the pile of technologies put forward. It doesn't help that I personally have yet to see a use for a blockchain which isn't replicating an existing financial instrument while trying to avoid the eyes of the state. I’m sure there is some good things in the middle of it all but I respect the authors of this article for having the courage to delve into the whole steaming pile. I certainly do not have it.

practice9 5y ago
Blockchain isn't even central in Web3, but it surely helps. Web3 = decentralized identity, full data and connection graph ownership by user, reputation transfer, verification via zero knowledge proofs, support for VR/AR and 3D objects. All of this stuff is either in prototype or draft phase, but it's ok. These things need to be built to stop horror stories on HN about "algorithm justice" and "data kingdoms”: - Google accidentaly bans your 10+ year old Gmail account that is a huge part of your online identity, oops. You can't access your important data or reach support if you can't make this situation a huge deal on HN, Reddit or Twitter - Facebook or Twitter locks your account because you added a new sentence to your About you section - LinkedIn reads your messages and makes sure you can't automate responses to recruiters, locks your account if you reply in a generic way
- chrisfrantz 5y ago
  Sure, but that’s replaced with user’s being in control of their identity (permanently). Lose your keys, you’re out of luck and locked out of who knows how many applications permanently. It might be fine for us, but just think of the less technically inclined folks in your life. Are they going to remember a 32 word phrase or use a password manager for a key? And what happens if they’re hacked? If google detects your account is hacked, you may be able to salvage it. If someone nabs your wallet, they get access to however many apps you have set up along with whatever funds you have in there.

madrox 5y ago

Today, I hopped into a Twitter Space called "web3 for gaming" and from the moment I joined until the moment I left five minutes later was talking about how crypto payments need to be better on mobile. This feels like when web2 was coalescing as an idea. A lot of people were trying to shoehorn their pet technologies into the discussion. XML was holding on for dear life. It's ridiculous and completely divorced from the topic at hand. My only explanation for the behavior is that it's difficult to see the obvious absurdity when you're deeply invested in a particular outcome.

euske 5y ago

Every time I read about decentralization, I remember this episode from NPR Planet Money (one of the best podcasts, btw). It's about Libertarian Summer Camp where they tried to spend a day without fiat money. Gold standard everything. Turned out it's actually pretty hard because you have to get gold, and make sure the gold isn't fake, all by yourself. You bought a hotdog with the gold and now you have to worry about if it contains anything FDA-banned substances, etc etc. cf. https://www.npr.org/sections/money/2017/06/28/534735727/episode-286-libertarian-summer-camp https://www.npr.org/sections/money/2017/06/28/534735727/epis... Being decentralized means that all the efforts that a central government is currently taking will be distributed to everyone, and now everyone has to worry about things that were taken granted before: basic safety, security and trust. This is why there aren't many decentralized systems that caught on because their usability is pretty bad for most people.

1ark 5y ago
Can't crypto exchanges provide the same safety, security and trust as banks today? Everyone can choose to be their own custodian or not.
- 1270018080 5y ago
  Yeah a centralized and regulated market to exchange funds would definitely make it easier to use crypto as anything more than a scam or buying drugs.
deleted 5y ago
[deleted]

thesuperbigfrog 5y ago

Web3 requires retrofitting the web to use blockchain technologies to do what the web can mostly do already. In "Blockchains Are a Bad Idea", James Mickens gives several arguments against blockchain-based systems like Bitcoin: See his presentation here: https://youtu.be/15RTC22Z2xI https://youtu.be/15RTC22Z2xI 1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions. 2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections. 3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have.

jimmydorry 5y ago
> 1. People have out-of-band trust relationships in real life which reduce the likelihood of malice. Bitcoin-style anonymous identities undermine trust relationships and are not needed for legitimate (not illegal) transactions. Bitcoin provides pseudononymous identities. Just like how someone can move to a new domain or amazon account after word gets out that they are selling deffective goods. Trust only goes so far, even when dealing with people you should be able to trust. If this were not the case, then close-to-home scams would not exist. E.g. embezellment and other forms of stealing from people you work with face-to-face. . >2. Real life legal systems encourage good behaviors. If you have a dispute with someone, you can sue them. Bitcoin and related systems lack these protections. The legal system is complex, slow, and _EXPENSIVE_. A lot of bad behaviour also goes unpunished when the cost to rectify is greater than the amount stolen. Offering an alternative, low-cost and quick system, and accepting the downside of there being no "takebacks", who is to say this is a strictly negative thing? There is also nothing stopping a service provider from stepping in and providing dispute resolution by way of mostly automated eskrow. If the transaction of goods for money happens without flaw, then the money is released automatically. If an issue occurs but the buyer and seller can resolve it amicably, that two is automated. In the unlikely case that one or both parties are malicious, the service provider reviews the case and releases funds as appropriate (e.g. checking that the parcel was actually posted, reviewing images of the good if it was damaged in transit, resolving as best able in case of scams). . >3. Existing tools such as public-key cryptography and digital signatures can provide most of the functionality that applications need without the problems that blockchain-based systems have. They can, but there are very few examples of such tools. This is hackernews, and this opinion is repeated ad nauseum, yet I don't see anyone actually going out and hacking something together. Just like how it has been possible for financial houses to open up APIs to allow people to better manage, automate or make their money work exactly they want; it should come at no surprise when something comes along that actually allows this, no matter how much people cry that this was all possible and much more efficient without $NewTech, the people that have adopted said $NewTech aren't going to care too much.

smoyer 5y ago

I kept reading hoping for sections on IPFS and DAT/Hyper. In many ways I'm more excited to see where peer-to-peer DHTs go!

slmjkdbtl 5y ago

The way I see it is the idea of "ownership" creates a way to produce scarcity from story telling. If you have a good story to tell about why people should "own" your "goods" you can make a fortune. I think it's very interesting in economy / sociology / psychology sense, and an amazing opportunity for cash grab. But I won't call it a progress on web to call it "web3" because it does nothing on connecting people together like web 1.0 and web 2.0

ldehaan 5y ago

Someone should let Amazon know web 3.0 isn't serverless, they didn't get the memo.

detaro 5y ago
Amazon is using "web 3.0" as a label for Lambda, really?
- kwertyoowiyop 5y ago
  Oooh, isn’t Lambda in the metaverse too?

Uehreka 5y ago

> However: just because you don’t need a blockchain to do something doesn’t mean the industry won’t settle on using blockchains to do it anyway. The technology industry is immensely path dependent. Particularly when buckets of money appear, feedback loops can form whose outcomes seem all but inevitable. Speculators and venture capitalists alike have inundated crypto with cash. There’s a certain reflexivity to it: when cash pours into anything, the intrinsic value of the thing is at least the value of the cash… and potentially much more, if that cash is invested productively! Blockchains may become the future — including for use cases where they are not natural fits — only because their story was told, speculated on, invested in, and told some more. This bothers me: That we could end up with expensive, unnecessary systems that exist not because they offer a tangible benefit but because everyone just kept going along with things, collecting investor money and ignoring criticism until it was too late. I don’t see that being apocalyptic necessarily, I think Adam Smith’s scythe will mow down any companies that make truly bonkers decisions on this stuff. But it bugs me that we could collectively spend years arguing about this and building blockchains and training a generation of blockchain engineers only for the near totality of blockchain stuff to fail for reasons that were evident from the beginning.

stanmancan 5y ago

Discord but access is granted by owning a specific NFT. Mint limited numbers of the tokens for specific groups. The value of the token ends up being based on the current members. Want in? Buy a token off someone. Done with the group? Sell it. Exclusivity is appealing to many.

de6u99er 5y ago

If it doesn't get broad adoption, can we reuse v3 or do we have to go directly to v4 and let everybody know that we don't talk about v3?

denton-scratch 5y ago
The first rule of v3 club?
twic 5y ago
It'll be IPv4 -> IPv6 all over again.

sdn90 5y ago

I think if you take a Western/developed country centric view, all of crypto seems pretty useless. In the rest of the world, you probably dealing with some or all of the following: - Dysfunctional government - Hyperinflation - Limited access to financial/investment products if any The crypto space does have a huge amount of problems, but I think there's some innovative stuff going on in crypto. You'll end up writing it off if you just fixate on the speculators and the "blockchain everything" people.

husamia 5y ago

missed an important development of IPFS

firexcy 5y ago

Thank you for the no-nonsense writeup. Simply reading through it helped me solved many ambiguities and puzzles. Could you please provide some further readings, esp. high quality materials that have had helped you in the compilation of these observations?

city17 5y ago

Whenever I read about Web3 I always get the idea the feeling it's an entirely self-interested idea or movement, and there is nothing idealistic about it. Instead of control being with a single corporation, control will be with an exclusive limited group of founders who got in cheap, and to which access is sold at a significant premium. It pretends to democratize things, but rather moves from a monopoly to an oligarchy, which works great for the 'in' group but not necessarily for those outside it.

otikik 5y ago

> If the crypto economy has productive ends, they must ultimately rest here Seeing this put as a conditional is refreshing after all the hype.

Animats 5y ago

It's a good article. Much to think about. I'm not sure that "blockchain" is central to "Web3". "Web3" may be augmented reality, which doesn't need a blockchain.

exdsq 5y ago
I think Web3 is just a term that something will change the web. Semantic web used it first, there's the whole AI/VR Web3 movement, there's crypto, etc...

davepeck 5y ago

Hi all — I wrote these notes with my colleagues at PSL while trying to wrap our heads around the madness that is Web3/Crypto. I’m an engineer by background and sort of a skeptic by nature; I think of this piece as a collection of loosely connected, hopefully pragmatic opinions from a builder’s perspective.

jules-jules 5y ago
thanks for the well-written primer. Just one observation. You write: >Over time, Ethereum has proven to be sub-optimal for the incredible demand DeFi services have seen. The network has diseconomies of scale and, given its low throughput capability, gas fees (the cost of executing a transaction on the Ethereum network) have recently been over $150. This makes executing simple low-value transactions, such as swaps on Uniswap, prohibitively expensive! Since the emergence of DeFi, there are several other L1 chains (like Solana and Avalanche) that have become a popular place for DeFi developers to build with transaction fees. Ethereum itself is also in the midst of the infamous “ETH2” transition, which aims to solve this problem on the Ethereum network itself. This is not correct in the sense that a) 'ETH2.0' is now deprecated term, and b) does not solve the gas fee issue by itself. Ethereum has pivoted to a modular rollup centric roadmap that solves the high costs of transactions already now (cf StarkWare and MatterLabs zkSync) while still keeping the secuirty and decentralisation of the main Ethereum settlement layer. This is in contrast to other L1s such as Solana which have sacrificed decentralisation for higher speed and throughput. Check out this wonderful resource by @epolynya for the most comprehensive summary of this new roadmap https://polynya.medium.com/rollups-data-availability-layers-modular-blockchains-introductory-meta-post-5a1e7a60119d https://polynya.medium.com/rollups-data-availability-layers-...
- davepeck 5y ago
  Thanks. This is good detail. I may go back and revise this corner of the post.
acjohnson55 5y ago
This is truly fantastic work. This is going to be my new recommendation for anyone who wants to seriously grapple with the space. I'm a crypto skeptic, but I think you make a strong point that crypto doesn't have to win the future on technical terms, it may be the place where new products emerge simply because it inspires people.

v_london 5y ago

Thanks for the great article! I wished the section on DeFi addressed the biggest elephant in the room, overcollateralization. A DeFi borrower always needs to lock in more assets as collateral than what they are borrowing, thus defeating the whole purpose for taking a loan aside from financial speculation. And there's no real way to solve it: all mechanisms I've heard of either try to replicate some form of background checks on borrowers (not decentralised, and uses the real world), or claim to use real-world assets as NFT collateral (once again, uses the real world). Thus I can't see a way for DeFi loans to ever be used for mortgages and other loans regular people actually need. Of course DeFi is more than just loans and borrowing, but that's an aspect that's constantly promoted by evangelists so I think it's an important point to mention.

toolz 5y ago
Can you provide an example of someone claiming defi can provide solutions for loans? The best I can come up with logically is something like cardano's prism that effectively puts a persons encrypted identity on the blockchain which allows that person to reveal things like their grades etc. to future partners as a means of quickly establishing trust. Maybe something like that could enable defi loans? Even that is a stretch.
- hervature 5y ago
  Searching for "DeFi loan" returns a deluge of results with https://defirate.com/loan/ https://defirate.com/loan/ at the top for me. They seem content claiming that secured loans are useful loans.
  - spullara 5y ago
    They are primarily useful when selling the collateral would involve paying income taxes. Instead you borrow against it.
DreamWalker1 5y ago
I think DeFi basically justifies the high market cap of ethereum. You have a decentralized exchange working 24h, with basically no downtime. Compare it to normal exchanges: - need to register - need kyc - hard to tranfer LARGE sums cheaply - your bank can block your assets as well as your gouverment - fees are sometimes very high as well. Example tried to convert one currency to an other 1% fees in europe. I think you would pay less in a DeFi setup. - Now imagine you could buy stocks and so on on defi. That would be a killer application. I could go on but the point is. DeFi solves a problem.

manbart 5y ago

‘Web3’ is just new window dressing on the same old crypto casino. “Get rich quick!” is the selling point

kwertyoowiyop 5y ago
It needs a new protocol: ponzi://
Animats 5y ago
Exactly. If Bitcoin had not gone "to the moon", all of this would be a tiny niche, like Chaum's DigiCash was. The problem is all the junk riding Bitcoin's coattails. At some point, probably soon, the bottom will fall out of at least part of this. NFTs are already crashing. That's not too visible, because there's no "market price" across different items. But you can look at sales on OpenSea, and notice that the resale prices are mostly lower than the previous price.[1] Smooth Love Potion [2], part of the Axie Infinity Ponzi, already crashed. The big moment will come when Tether comes un-tethered. It cannot survive a net outflow, because it has very little asset backing. Something is going to crack in the Tether/Binance area. Binance is giving some people 200x leverage.[3] That never ends well. [1] https://opensea.io/collection/collectvox?search[sortAscending]=false&search[sortBy]=LAST_SALE_PRICE&search[toggles][0]=HAS_OFFERS https://opensea.io/collection/collectvox?search[sortAscendin... [2] https://coinmarketcap.com/currencies/smooth-love-potion/ https://coinmarketcap.com/currencies/smooth-love-potion/ [3] https://www.coalexander.com/post/the-tether-binance-axis-and-the-great-crypto-crash-of-2022 https://www.coalexander.com/post/the-tether-binance-axis-and...
- cinntaile 5y ago
  > Exactly. If Bitcoin had not gone "to the moon", all of this would be a tiny niche, like Chaum's DigiCash was. I don't think "if this didn't happen then this wouldn't have happened" is a real argument, it's just a statement. True for just about everything. It's possible I'm misinterpreting and you just mean it as a statement?
  - moolcool 5y ago

cornstalks 5y ago

> Protocols like SMTP (1981; email), TCP (1983; reliable packet transmission), HTTP (1991; web), and XMPP (1999; chat) all created immense value while capturing little for their inventors. Blockchains upend this, allowing inventors to capture considerable value for themselves. That... seems like a huge negative to me. No wonder crypto enthusiasts give me the same feeling as relentless door-to-door salesmen.

wmf 5y ago
The fat protocol hypothesis hasn't been proven. If your app has value, why would you let a protocol take any of it?
- krrrh 5y ago
  It still really depends how far down the stack you go. One of the better observations Eric Raymond made in his essay The Magic Cauldron was that the closer you get to infrastructure the stronger the demands become for open protocols (emphasis added): > The network effects behind TCP/IP's and Linux's success are fairly clear and reduce ultimately to issues of trust and symmetry -- potential parties to a shared infrastructure can rationally trust it more if they can see how it works all the way down, and will prefer an infrastructure in which all parties have symmetrical rights to one in which a single party is in a privileged position to extract rents or exert control. Sure you may be able to build a bespoke proprietary protocol on top of the open foundations of http or the bitcoin and etheream blockchains, but businesses will have an incentive to shop for more open systems if they are staking anything important on it. http://www.catb.org/esr/writings/magic-cauldron/magic-cauldron-10.html http://www.catb.org/esr/writings/magic-cauldron/magic-cauldr...
  - davepeck 5y ago
    This is great! I remember Raymond’s post from my distant past. Thanks for bringing it to my attention again — it’s very relevant.
- machiaweliczny 5y ago
  Because this allows to make bigger pie for everyone in the end. Not sure it does. Just speculating based on economic benefits of infra - see roads, transport, internet, aws etc.

kordlessagain 5y ago

Meanwhile, distributed and/or encrypted technologies are enabling flash mobs to loot $200 jeans from Nordstroms.

aspenmayer 5y ago
Link?

mattlondon 5y ago

So .. TL;Dr web3 is nothing to do with the web, and is just the same old smart contract crypto hype we've all seen before? No mention of the actual distributed web protocols like IPFS or Dat as far as I could tell. Have I massively missed something or has the crypto community just co-opted the name web3 for their own non-web related stuff? How does the web factor in to crypto?

kall 5y ago
I think the web part is now "log in with your wallet, fetch account state from the blockchain". It all happens on the normal web and the blockchain access is facilitated by "normal" web API gateways like Infura or Cloudflare. This is my view from the outside so it might be off on the details. It seems pretty reasonable, as far as crypto stuff goes, except that there is a massive, expensive machine behind all the HTTP APIs that is solving very specific problems you probably don‘t have while making someone rich.
- k__ 5y ago
  Also, many wallets come with a browser extension, to blur the lines between web and crypto even more.
BatteryMountain 5y ago
So I attended a year end function last month and there was an independent financial advisor present (CFP straight-arrow-type-guy that was reluctant about crypto's a few years ago). During a conversation he expressed regret that he didn't get onto the crypto train 3 years ago and that he is going alllll in on web3 and threw the word nft's around a bit and that he has some more web3/nft webinars lined up for the coming week. Mind you, this guy manages about $50M for his clients (it's true, I saw his dashboards on a third party website - he knows his shit). He told a whole bunch of people at the event about nft and how it will put spotify and youtube out of business. But the thing is, he is not tech-inclined at all and spends most of his time on excel and on third party platforms (as in, fund manager platforms, insurance platform, medical aid, taxation etc). So what I took away from his talking about this stuff is that financial advisors are being "educated" to think that web3 = crypto = new 4th industrial revolution etc and everyone will get rich as hell very quickly so we all have to do it NOW. It was a huge wtf moment for me because I was mostly ignoring this stuff and the whole web3 umbrella and here I have a legit CFP guy talking about this stuff. All while I'm standing there not knowing wtf he is going on about, most of it sounding extremely dodgy from a software developers perspective. Make of this what you will but I think a lot of people will get hurt, esp non-tech people. I feel like these people live in an alternate universe and they've built a whole ecosystem of webinars, trading platforms that they are trying to sell onto normal people that doesn't know better; that doesn't seem to be used for the greater good (most of it scammy or used for crime etc).

evergrande 5y ago

Quite possibly the difference between people who are hostile vs favorably disposed to Web3 is whether or not they think traditional orgs work fine or need improvement. Frustration with traditional organizational pathologies is not universal. The right comparison may not be with past tech revolutions. It may be to organizational evolutions like monarchy to democracy, women entering the workplace, the invention of the limited liability corporation etc. In each case there were people who thought it was unnecessary. I suspect what makes Web3 appear extra contentious is that it divides core members of the middle class. Like artists for eg. Artists tend to be reliably anti-tech initially, taking pride in being socially middle class but economically underclass unless supported by other means. Artists still largely depend on patronage but now are less beholden to institutions/expert tastemakers (museums, grants, commercial art buyers like movies) or potentially tyrannical cohesive crowds based on ideological aesthetics (Patreon style). Web3 loosens the grip of both. Web3 is Crowds3 too. We focus too much on authority figures and institutions. Crowds evolve too. Crowd1 = geographic scene in a city that could ostracize you Crowd2 = filter-bubble online crowd that can cancel you Crowd3 = skin-in-the-game crowd that doesn’t subsume individuals [credit to https://twitter.com/vgr/status/1463182365555970049 https://twitter.com/vgr/status/1463182365555970049]

kall 5y ago
If the tyrannical crowds on Patreon are a problem skin in the game is going to 100x that. "You have a fiduciary responsibility to every single one of your fans“ sounds like a black mirror episode.
jollybean 5y ago
I suggest the people who have the most beef with 'traditional orgs' haven't worked in them (or not for very long) and don't understand the nuance of the limitations of them, and also don't grasp the value that's created at scale. Also, I think less than 0.01% of 'artists' have ever heard of Web3, even most people in Tech haven't really hard of it or couldn't describe it in any meaningful way.

PretzelPirate 5y ago

One interesting misrepresentation is this: “ Several innovations in distributed consensus design make Solana’s performance possible.” Solana’s consensus protocol isn’t responsible for its performance, it’s the fact that they mandate higher performing machine SKUs and at least 500Mbs (recommending 1Gbs) internet speeds. They also had to largely centralizing and have around 1000 validators. Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node. I’m not sure why I’d use a blockchain that’s very close to being a centralized service. That’s the worst of both worlds, you don’t have censorship resistance you get with Ethereum and you don’t get the consumer protections you get with fully centralized services.

lui8906 5y ago
> Solana’s consensus protocol isn’t responsible for its performance, it’s the fact that they mandate higher performing machine SKUs and at least 500Mbs (recommending 1Gbs) internet speeds. While it's true that Solana nodes have higher requirements than Ethereum full nodes (though not sure about validators?) I think it's incorrect to say that Solana's consensus protocol is not responsible for the high performance performance. Solana's consensus protocol (Tower BFT) works tightly with Proof of History. These two elements coupled together allow that the validator leader can be rotated asynchronously allowing performance increases in block propagation, throughput and ledger storage. Have you really had a good read of how Solana works? For eg. Sealevel allows for parallel contract execution, something which to my knowledge no other chain is capable of. All these innovations combined with the higher node requirements allow for TPS that no other chain is even close to and the Ethereum Modular vision will not achieve for quite some time (assuming it works). > They also had to largely centralizing and have around 1000 validators. Not sure what you're pointing to here. There was 600 validators a few months ago. Now there is 1000. 2000 additional validators are on devnet and would likely go onto mainnet in the coming months. How else should a blockchain decentralize then to add additional validators and try and spread the delegated stake around to reduce the number of nodes required to halt the network? The fact that Solana went down for 17 hours not too long ago and there was nothing Solana labs could do to bring it back shows the validators are not run by themselves. > Ethereum’s fees and performance are due to a push for decentralization instead of cranking up the max gas per block to a level that wouldn’t be feasible for someone at home to run a node. Ethereum's fees are due to its wild success + it's very low TPS on the L1 because it was more or less the first of its kind. Subsequent chains like Solana have made thousands of small or large alternative engineering decisions that in sum allow for much higher throughput and lower fees. Solana doesn't use gas, perhaps you're thinking of BSC or AVAX?

booleandilemma 5y ago

Who defines this stuff?

vmception 5y ago

> However: just because you don’t need a blockchain to do something doesn’t mean the industry won’t settle on using blockchains to do it anyway. Exactly, both blockchain skeptics and one-blockchain maximalists miss that people are doing what the market can bare. Do what the market can bare. Why die on the ideological hill? What utility does that have? The path for founders is simpler. The founders bring their whole network to their ventures over and over and over again. That is projects launched on blockchain platforms right now. Unless the non-blockchain space magically becomes competitive for founders, globally, of any background, anonymously, overnight, then that world isn't competition. There are 3 trillion dollars within the crypto ecosystem that doesn't need to be converted to cash to be used to fund new ventures.